Metal Recycling is Critical for Conservation Goals

Ever since its IPO last year, (with the stock performing well enough subsequent to listing) , Nupur Recyclers has helped shine a light on the metallurgical recycling industry in India. For the Rs 163 crore revenues  firm (FY 22 numbers),  the higher visibility has meant a better understanding of the sector, its role and relevance for a market like India. SaurEnergy caught up with Rajesh Gupta, Chairman and Managing Director, Nupur Recyclers on the performance so far, and prospects for the future.

 

We understand you mostly import scrap material for recycling. Is that changing now? How do you see the prospects for sourcing from India? 

Rajesh Gupta: Yes, most of the scrap is imported from USA, Europe, Asian countries and Gulf region. These are our vintage clients, and they already export to many other nations and have big scrap yards. We are paying a fair price for this material. It would be accurate to state that we are considering a number of options before approaching Indian scrap yards for the material. They appear to still be in the beginning phases, though.

As part of its National Steel Policy, which aims to produce 300 million tons of steel annually by 2030–2031, India recently announced government schemes, such as the vehicle scrappage policy, that should increase scrap generation in the upcoming years while simultaneously reducing its dependence on imports.

In the current situation, local scrap production in India won’t completely meet demand. The automobile scrap policy will help, but the amount is only about 30–40% of what is needed. India is one of the major importers of scrap metal, but if this industry is organized, we will undoubtedly have a bright future as shipping costs, export duties, and other connected taxes will decrease.

 

How is the global non-ferrous recycling industry organized? What are the competitive advantages one needs? 

Rajesh Gupta: The global non-ferrous metal recycling market is divided based on geography, metal, and sector. Construction, automotive, consumer goods, and industrial goods are the different market segments. Copper from pipes and tubing, aluminum from window frames, storefronts, curtain walling, and door handles, and zinc from roofing and galvanized steel items are just a few examples of the non-ferrous scrap that is gathered from the construction industry. It should be remembered that India implemented a vehicle scrappage policy in 2021, long after it had been adopted globally.

Offering products and services that are tailored to the needs of the market segment should be a competitive advantage. The target industries must be catered to specifically since they must be eager to consume the given items. The largest benefit would be affordable, 100% supply to the related industries.

 

Does your business have the potential to qualify for carbon credits for the recycling you do? 

Rajesh Gupta: According to our understanding, we will be qualified to receive carbon credits when we consistently and quantitatively produce fewer greenhouse gases than the present alternative. Increasing greenhouse gas emissions are a result of metal mining. The best alternative is recycling. When we recycle, we first conserve natural resources and then use fewer resources to produce metal, which directly affects price.

Additionally, if we choose to melt using green fuel rather of conventional gasoline, we will undoubtedly be eligible for carbon credits. We have already enlisted the aid of a company that is assisting us in comprehending the various ways to be eligible for carbon credits.

 

How do you plan to grow sustainably going ahead? Do you seek global tie-ups on the supply, sell, or even technology side? What is the 3 to 5-year growth vision for the firm?

Rajesh Gupta: Recycling metals minimizes emissions and air pollution, making it a more environmentally friendly option to traditional disposal methods. You may help your company meet its carbon reduction objectives by recycling metals.

Yes, international collaborations are the main factors. India is now the principal location for the import of scrap, and it also exports finished items and raw materials to other nations. We are currently exploring for far more modern technologies outside of India to use with these technical devices in the next facilities. The growth goal is to establish a “Industrial hub” with specialised recycling facilities to meet industry needs and handle all recycling scrap. This will facilitate better trash management. Modern technology will be used in these manufacturing facilities, and since we can serve ourselves, there will be less waste overall.

 

Post your successful IPO, does that impact in how you see your business and run it? Where has the biggest impact been?  

Rajesh Gupta: A successful IPO was indeed a big feat. We were overwhelmed by the love people have shown us. An IPO is always a big step for the company as this gives company ability to grow and expand furthermore. We got a lot of visibility there was an increased public awareness of the company because IPOs often generate publicity by making their products known to a “new group of potential customers”. This money was utilized in the means of working capital, we have more options to buy on cash basis, and liquidity is improved.

There are several avenues where we have seen the positive impact. The balance sheet size has grown and we see that we being successful it has given a lot of confidence to other companies in doing business with us.

 

Which are the sectors that offer the highest recycling rates currently? Which ones have the potential to recycle much more? 

Rajesh Gupta: One of the most rapidly expanding sectors in the world is the recycling of metal. Metal recycling is one of the most important strategies for preserving our environment and the demand is rising quickly in a number of different industries. Recycling your used products has a number of advantages, including lowering waste, saving landfill space, reducing air pollution from incinerators (which burn fossil fuels), and creating jobs for people who would otherwise be unemployed due to a lack of employment opportunities or unfavorable economic conditions.

The metal is heavily used in the auto sector like the frames, engines, and other components of cars and trucks are made largely of metal. Its clearly indicates that one of the main forces behind the need for recycled metals is the automotive industry.

Currently, just 12.5% of e-waste is recycled. 35,274 lbs. of copper, 772 pounds of silver, 75 lbs. of gold, and 33 lbs. of palladium can be recovered for every million recycled cell phones. Many different metals, including gold, silver, copper, and aluminum, are found in cell phones, computers, tablets, and other technological devices.

 

Are you looking at getting into newer areas going ahead? We see a strong push towards Lithium battery recycling for instance. 

Rajesh Gupta: We always seek newer opportunities for investment that will benefit our stakeholders and investors. We attempt to apply all of our knowledge to every opportunity we come across. Our vast recycling experience has taught us that scrap is the ideal material to recycle.

Yes, there is a significant movement toward recycling Li-ion batteries. A relatively small number of academic research groups that typically operate independently are the focus of the improvement endeavor. A vast amount of used Li-ion batteries are anticipated in the near future from ageing electric vehicles and pervasive portable gadgets, and start-up businesses are commercializing novel battery-recycling technology. More academic studies of the problems have begun.

 

What are the biggest risks for your business? 

Rajesh Gupta: Yes, recycling can include some risks. Commodity pricing plays an important role in metal business. It is a risk that a business’s financial performance or position might be adversely affected by fluctuations in the prices of commodities. Uncontrollable factors such as inflation, weather, foreign events, new technologies and even rumors can have devastating consequences to the price of a commodity.

The second danger is buying scrap in accordance with specifications; the quality of the purchase of scrap must be of extremely high standards. The margin shrinks if the necessary material contains a significant amount of unwanted scrap. Quality inspections and expertise working with various companies have to be used to mitigate this.

 

What could improve the recycling market and rates in India- at a policy level or otherwise. 

Rajesh Gupta: India is now developing its industrial collection and recycling infrastructure. India is currently preparing to build roughly 100 new garbage incineration facilities, which when completed in 2050 may generate upto 3 GW of energy from waste. Legislative initiatives to raise the waste utilization rate are also being worked on concurrently.

In light of the present emphasis on sustainable consumption, the new draught rules do need to take these concerns into consideration. Similar to what it did in July, the ministry formed a team to operate within a comprehensive right-to-repair framework. Customers also owe it to themselves to make sure that whatever they buy can be safely recycled and won’t end up in electronic graveyards where it will come back to haunt us.